Is Binary Options Gambling?

To answer this question we must first categorize the 3 most popular ways to gamble.

Casino Fixed Odds Games (such as roulette)

Sports Betting (such as betting on a NFL team)

Poker (such as Texas Hold’em)

Casino Games

Casino games are nothing like trading binary options. Taking positions in the market vs betting on a roulette is not the same. In casino games, you get a return based on the probability of an event and it is always at a disadvantage to the player/trader. The house has the edge and the house always wins in the end.
Sports Betting

Sports betting and especially with the introduction of live betting on games via Internet, one will find several similarities. In binary options trading, you can take a position (similar to placing a bet) that a stock will go up or down. This is similar to sports betting. Let us take a soccer game as an example where you can place a bet saying: Team A will win with more than 1,5 goals over team B. If team A wins with 2 goals or more the bet is won. If they don’t, you lose. There are only two outcomes similar to a yes-or-no position in binary options. In football, the experts will study both teams’ performance leading up to the match and also look at any historical data available which holds significance to the game.

For example: if one team has won the last 10 matches out of ten it is believed that it has a superior team and strategy. If the two teams have played a draw the past five times, smaller things are taken into consideration such as: are there any changes since then? Are there any players with injuries? And so on. In sports betting, if you know something that the majority of the market does not know (yet) you can leverage on that information. You need to act quickly by placing a bet and it is crucial to do this before the info you obtained becomes general knowledge. In sports betting, it is also possible to place a bet and should the odds increase in your favor, you can sell the bet back and make a profit from the difference between the two odds.

This is exactly like trading stocks where you can buy shares, and once they increase in value you sell or the opposite scenario where you shorten stocks and once they start dropping you cash in. Let us explain an example of how to legally get insight and possible benefits from this when trading binary options. A high-end clothing line is selling its jeans for $1000 a piece. People are paying a price making the company valuable and highly profitable due to its extraordinary margins. If you notice these brands in outlets and low-end clothes stores it is because they are selling these jeans to these stores to keep the sales numbers high and making the books seem better than they are. These low-end stores buys the jeans from the factory at the same price as the high-end shops but they sell them for way less.

When the consumers discover that the $1000 jeans can be bought for $200 the demand decreases, since nobody is willing to pay $1000 for a pair of jeans they can get around the corner for only $200. When it becomes a known fact, the sales will plummet as will the shares. If the news hits Wall Street before the consumers realize what is going on, the shares will start to plummet since investors and shareholders lose faith in the company, the brand and possibly the management. You can say that the price of the shares have been high due to fake expectations.

Estimate the Future

Nobody can predict the future. We can all speculate and try to predict it based on knowledge, feel and experience but you can never know all the variables. The reason why binary options are more interesting and profitable than sports betting is that you are betting against the market. You can find a nice market and gain an edge. Winning punters get banned from betting at bookmakers or limited to bet very small amounts as the bookmakers way of saying “Go away! We do not want your action”. In binary options you are not typically betting against ‘the house’. The brokers are simply buying and selling your positions by trading with others. If two people place a bet, one bet call and one bet put, the broker has no risk. For you to take a negative position on the Apple Inc shares, somebody needs to be willing to take the opposite position. If the broker is not willing to take a too high exposure on a position, they can go and buy the opposite position in the market which means they will profit with a smaller margin but also take very little risk.

Poker

Poker is by most poker players considered to be a skill game. On the contrary, most governments label it as gambling. Poker and binary options have several similarities. A skilled poker player has an edge vs. a newcomer to the game just like a skilled trader has an advantage over a random person on the street. Short term, the inexperienced can be just as profitable as the skilled trader/player and in some cases even more profitable. It is hard to argue that becoming an experienced trader and obtaining knowledge about different strategies while possessing a general understanding of the game/market will not have a positive impact on your ROI. Short term, luck does not make one resilient in the market long term.

Online Binary Options Trading Platforms and Poker Rooms

In poker and binary options trading you do not necessarily play against the house. On a small scale you do; on a large scale you do not in binary option trading. The ‘house’ takes a small fee of your trades. The brokers naturally need to pay its staff salaries, marketing is costly and the online binary options brokers are being scrutinized by governed financial institutions securing the companies are following the laws and regulations. We highly recommend that you only deposit with brokers that you find listed on our site. This will secure safe payouts and should you face any difficulties we can assist you.

Analyzing Patterns

Poker involves a high degree of analyzing peoples´ betting patterns when doing an opponent check, bet, raise or fold in certain situations. When you start picking up a pattern, you gain a financial edge and stand to increase your profit rate. Keep in mind you will always make mistakes regardless how savvy you become. Another important factor is that in poker, as well in the stock market, people can get distracted by their emotions. They hang on to a hand that looked good 5 minutes ago or keep shares because they have a personal relation to the company beyond pure and simple profit making. On the contrary one might possess knowledge or have a secret strategy hence buying when then the most obvious move would be selling and cut the losses. You never know for sure. That is the beauty!

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